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men to fulfill those orders; how long will they take; is it their intent to sublet in order to advance their contracts; do these private industries desire to have the Government go out and take over material and equipment and machinery from other private industries; what available manpower is there and machinery is there in the Los Angeles area.
I think that if we start that inquiry it will lead us back into steel and aluminum and copper, and zinc, and other subsidiary industries, and I think that is the only way that this Senate committee is going to get any concrete realization of what is happening in the defense production.
I am not at all critical of these two gentlemen. Quite to the contrary. I am sure that they are doing fine work and they are doing everything they can to assist, but certainly I have no concrete idea as to what is happening in the defense industries as a result of any testimony here given, and I doubt if any other Senator has.
Now, we have four great shipbuilding plants in the Los Angeles area and have hundreds of millions of dollars worth of shipbuilding orders. I understand they do not have the men and the equipment to make good on those orders, and I am likewise informed that it is expected that this bill will allow them to go out and take over existing machinery in the Los Angeles area and install it in their own plants; take the personnel and workmen out of these small plants, and go ahead with the orders themselves.
I am not saying that that might not be the thing that the Government will have to do. It may have to destroy many small businessmen and many organizations in doing it, but I do think that this committee ought to know what is the reason for this bill; whether it is necessary and what is going to be its ultimate goal.
The CHAIRMAN. Well, I should think that the 0. P. M. ought to be able to provide us that information.
Senator KILGORE. May I ask the witness some questions, Mr. Chairman.
The CHAIRMAN. Certainly.
Senator KILGORE. A little while ago you used the words qualified subcontractors. Just what do you mean by qualified subcontractors?
Colonel HARE. I mean a contractor who is in the kind of activity, that has normal production which indicates knowhow in working to tolerances or with the kinds of materials that we need.
We have so many inquiries from people who just appear to be curious; that is all.
Senator KILGORE. Well, on that same line now, do you keep or maintain a list of qualified subcontractors together with their qualifications?
Colonel HARE. That is maintained in the defense contract service in each of the 36 divisions.
Senator KILGORE. How does a man for instance who owns a plant get himself on that qualified list?
Colonel HARE. Well all he has to do is to present himself or write a letter to either the War Department or to his Congressman, or to the Defense Contract Service, or the President of the United States, or anybody that comes into his mind, and they do write to all of them, and ask that he be considered as a source for defense materials. That letter is then answered. His name is then presented to the Defense
Contract Service. He gives the Defense Contract Service what information they need regarding his tools, equipment, former production, floor space, as those are factors that enter into his capacity, and then he is catalogued as being available for a type, general type of work.
When the need for such type of work comes up, we turn to him quickly and he is then offered the opportunity to come in.
It is just like the selective service for the soldiers. It is in a sense selective service for industry. They register, and we call them when we need them.
Senator KILGORE. The reason that I asked that question is that I know a number of folks who have been running around in circles, trying to find out how to get on that qualified list; people who are capable of machine-tool work and have expert help and machinery, and such, and I was really after information for some people who have been asking for it of me.
Colonel HARE. By qualified list-may I interpose this—we do not mean that the War Department has a qualified list of bidders or suppliers. Anyone can bid who comes in or writes to our purchasing offices and offers to make a bid, regardless of his qualifications, but we do have our own list of people that we know are qualified from our surveys of industry, and the 0. P. M. through its Defense Contract Service is getting a list of subcontractors of the same type.
Senator KILGORE. When a man writes in and gives statistics on his plant, is there an inspection of that plant made to determine whether or not it is capable of producing what he says it will produce, so that you have an actual physical knowledge of the qualifications of the plant?
Colonel HARE. Yes. If this man's letter gives us sufficient information to appraise it, to appraise that plant, and it appears to be of value to our program, we have one of our district representatives survey the plant.
Senator KILGORE. And where are your district representatives located?
Colonel HARE. They are geographically distributed; they are located all over the country. There are 52 Army Procurement Districts and there are 36 Defense Contract Services, and then there are quite a number—I do not know the exact number, Navy, but in all there are about 117 people in the field whose duty it is to develop these sources of production for our war materials, and they are traveling every day.
Senator KILGORE. Of course, the Army and Navy are just looking after their own sectors. When their representative makes a survey of a plant, to determine what they are qualified to do. When a naval officer makes an inspection, he looks at it from a naval point of view.
Colonel HARE. Yes. He is a Navy technician. He sees that through the eyes of a naval officer, but he is supposed to report to the Munitions Board in the event that that firm is not particularly qualified for Navy work, but probably would be qualified for Army work.
We do no duplicate surveys.
The CHAIRMAN. You two gentlemen representing the War Department and the 0. P. M. a moment ago heard the statement made by Senator Downey of California.
I want to ask you if there is anybody in the War Department or anybody in the 0. P. M. who is sufficiently informed to provide the information which the Senator seeks.
Is there anyone who can provide the information that the Senator from California suggests that he would like to have?
Mr. MEHORNAY. I believe the 0. P. M.'s resident office in Los Angeles can give to Senator Downey the answer to the questions which he has propounded as applying to those shipyards and the possibility of the work which they could let out, and if that is the pleasure of the Senator, we will be very happy to get that preliminary information for him, and go right through to the end of it, if he might direct.
Senator DOWNEY. I might say, Mr. Chairman, that shipbuilding is being done there both by the Navy and the Maritime Commission, and as I said before I believe that each of those departments of the Government has taken the position to restrict shipbuilding yards as much as possible and to confine the work as much as possible within the established institutions, and it is along that line particularly that I would like to make my inquiry.
I believe that there must be men here in Washington, in the Navy Department, who must know every ship that has been ordered out there; every keel that has been laid down; every ship that has been launched. They must know the material and equipment and supplies. I am very sure that they are right here in the Navy Department. As a matter of fact I have talked with some gentlemen-I do not care to call their names, because the conversation was private, whom I think know. I think that there are men both in the Maritime Commission and of the Navy that have all of those facts.
Mr. MEHORNAY. Senator Downey, your information, of course, is more direct than mine; but I would like to say that within the last 2 months a qualified Navy construction officer with a designated engineer from our office, made a trip through all of the west coast navy yards for the particular purpose of analyzing the possibilities which are under discussion.
They visited all of the Los Angeles yards, as well as Mare Island and Bremerton, with the result that the Navy issued direct instructives, to those yards--and not to the private contractors--but to the yards themselves, that all possible work should be taken out of the yard. The same was done on the east coast. I do not, of course, know about the success of the actual operations following.
Senator Downey. I beg your pardon. You say issued by the Navy. Mr. MEHORNAY. Yes, sir.
Senator DOWNEY. Well, I had one of the Navy's ranking officers tell me just the contrary to that. I do not want to give his name. I would rather have him called before the committee.
Senator KILGORE. You are referring only to navy yards; not private shipbuilding yards.
Mr. MEHORNAY. Not private yards.
Mr. MEHORNAY. I was confining this remark to work done in connection with the trip made to the navy yards.
Senator DOWNEY. Mr. Chairman unfortunately, or fortunately, I do not know which, my mind works in a concrete way rather than a general way. I like to have something that I can get my teeth into. I do not care who is brought here, but I would like to have somebody come here and say “We have let $300,000,000 worth of work to the Bethlehem Shipbuilding plant in Los Angeles. That is composed of so many destroyers, so many cruisers," or whatever it is. “They have completed this.” “They have on order this much more. We know that they are equipped to do this; we know what their manpower is; it will take so long to get it out; it will require this, and they do or do not require the terms of this bill.” Then, take up the Maritime Commission in the same way and have somebody who knows what is being done about it by those companies, and state what is their policy, and give that information to this committee.
The CHAIRMAN. I should like to inquire as to whether or not there are representatives here from the Navy Department and the Maritime Commission.
(There was no response.) We suggested on yesterday that they be here, and I understand that Colonel Watt has conveyed the suggestions to those Departments, and if they are not here, we would like to have them here in order that we may get some definite information.
It seems to me that we have been dealing with this in the form of generalities, and have not been able to get the concrete answers to questions that have been directed to the respective witnesses. These gentlemen here say that they do not know. I thought that the 0. P. M. would give us the information with regard to it, but Mr. Mehornay here says that he is not in a position to furnish that information.
Are there any other questions any member of the committee would like to ask of the witness who has the stand at the present time?
Senator KILGORE. I would like to ask this one question: In the Office of Production Management as it is set up at the present time, you find the contractor and advise the procurement agency with regard to the contract and then supervise the work to try to help get it out. And now, is that about right? Mr. MEHORNAY. The first is an
an assumed responsibility. The second is our unauthorized responsibility, meaning that we only are charged with expediting production after the contract has been let.
Senator KılGORE. Who digs up the contractor; who tells them where they could go to get bids?
Mr. MEHORNAY. Well, we have assumed the responsibility, without authority, or without responsibility for doing it, to tell them where they could go to get on the bidders' list, where contracts will be let, whether we think that they are qualified to do that work, and by "qualified," I do not mean the details of qualification, but a knitting mill comes along and wants to bid on cannons, and we do not tell them where the cannon is going to be made. We do not give everyone all of the information, but we tell him when that is coming up and particularly do we tell him where the large prime contracts have been placed and attempt to arrange introductions and conferences for him to get on that as a subcontractor.
Senator KILGORE. That, of course, is with reference to potential bidders. I am speaking about your duty to the procurement services.
Do they come to you when they want to buy 100 cannons, say, do they come to you and ask you as to what factories are qualified to make them?
Mr. MEHORNEY. We have instances where they have done that. Senator KilGORE. Sometimes they just go direct themselves?
Mr. MEHORNAY. In most cases, very seldom do they come to us. But they do. They come to us and say, "We do not feel that we have a sufficient number of bidders. Will you give us or find for us additional bidders on this item?'' which we do.
Senator KılgORE. Then what actually happens is this, the Quartermaster wants a million pair of leggings, and you go out and hunt up the contractors, and they ask for bids. Then after they get the bids, go ahead and accept the bids, and the bidders do not produce, then the trouble is dumped into your lap and you have the job of prodding them along and making them produce; is that right?
Mr. MEHORNAY. That is correct.
Senator KILGORE. They do not consult with you before they let the contract and, of course, you do not know anything really about the qualifications of that contractor until after the contract is let, in a large number of cases.
Mr. MEHORNAY. If it is a contract in excess of $500,000, it is sent to our reviewing committee.
Senator KILGORE. Yes.
Senator KilGORE. Then if trouble arises, then you have to go in and try to patch up the plant and if necessary get them a loan for plant expansion.
Mr. MEHORNAY. We have done that.
Senator KILGORE. And the contractor can, under that system, get by possibly with inadequate plant facilities, relying upon the possibility of getting a loan or a grant of money for plant enlargement when he gets in difficulties, because of the desperation of the situation. that not about the facts too?
Mr. MEHORNAY. Yes. We, however, are proposing, and the services are sympathetic to it, a requirement that with each bid the contractor, potential contractor, file with them, and they have agreed that we may review that with them, a list of the machinery which he has; the machinery which he may need; whether or not he will need financial aid, and whether or not he can make this in his own plant and what contractors he may need. That is a current development under the present cooperative program between the services and the O. P. M.
Senator KILGORE. But there is no provision now on a contract under $500,000 that anybody be consulted except the service branch that is letting the contract and the contractor?" In other words, you are not in touch with that situation and do not know whether that contractor can comply or not?
Mr. MEHORNAY. We do not.